California employers enthusiastically obtained the choice by america Supreme Courtroom in Viking River Cruises v. Moriana, 142 S. Ct. 1906 (2022). That case held the Federal Arbitration Act permits employers to compel staff to arbitrate the person a part of their declare below the California Labor Code Personal Attorneys Common Act (“PAGA”). Some employers hoped that Viking River Cruises would considerably rein in PAGA litigation.
PAGA authorizes aggrieved California staff to file lawsuits to get better civil penalties on behalf of themselves, different staff, and the State of California for violations of California’s Labor Code. PAGA penalties can rapidly accumulate given the numerous attainable Labor Code violations and the truth that the default penalty is $100 per worker per pay interval for an preliminary Labor Code violation, and $200 per worker per pay interval for every subsequent violation.
In Viking River Cruises, the Courtroom additionally concluded that an worker would lack standing to pursue a consultant PAGA declare after his or her particular person PAGA declare was resolved by means of arbitration. Nevertheless, as a result of the Courtroom’s conclusion interpreted California regulation, this a part of the choice shouldn’t be binding on California courts. The California Supreme Courtroom is poised to determine in Adolph v. Uber Applied sciences Inc. whether or not it agrees with america Supreme Courtroom on that concern. Whereas a choice by the California Supreme Courtroom in Adolph stays pending, a number of California courts of enchantment have declined to comply with the conclusion by america Supreme Courtroom relating to PAGA standing.
For instance, in Galarsa v. Dolgen California, LLC, 88 Cal. App. fifth 639 (2023) (overview granted), the California Courtroom of Enchantment, Fifth District, held {that a} plaintiff who has been ordered to arbitrate her particular person PAGA declare can however keep a court docket motion to pursue a consultant PAGA declare in search of civil penalties for alleged Labor Code violations suffered by different staff. In Piplack v. In-N-Out Burgers, 88 Cal. App. fifth 1281 (2023) and Nickson v. Shemran, Inc., 90 Cal. App. fifth 121 (2023), the California Courtroom of Enchantment, Fourth District, reached the identical conclusion.
Not like these disappointing (for California employers) choices, the current resolution by the Courtroom of Enchantment, Second District in Rocha v. U-Haul Co. of California, 88 Cal. App. fifth 65 (2023), gives hope for employers. In that case, the appeals court docket held that concern preclusion bars a consultant PAGA declare when the plaintiff litigates particular person Labor Code claims in arbitration and loses. Given {that a} plaintiff will need to have personally skilled a violation of at the very least a single provision of the Labor Code to deliver a consultant PAGA declare, Rocha emphasizes the necessary hurdle particular person PAGA litigants face in arbitration. It is also necessary to notice that the choice in Rocha is opposite to that by the California Courtroom of Enchantment, Fourth District, in Gavriiloglou v. Prime Healthcare Administration, Inc., 83 Cal.App.fifth 595 (2022), which held that an arbitration award within the employer’s favor didn’t deprive the plaintiff worker of standing to pursue a consultant PAGA declare.
In sum, Viking River Cruises has not been the game-changer some California employers hoped. Though California employers might proceed to hope the California Supreme Courtroom decides Adolph v. Uber Applied sciences Inc. of their favor, that appears unlikely, significantly if the California courts of enchantment choices mentioned above rejecting america Supreme Courtroom’s conclusion relating to PAGA standing are predictive.
